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Outsourcing plus local AI will soon become more economical vs. frontier labs

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Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#261

Post by cdata »

goosejuice wrote: post #260
lunar_mycroft wrote: post #167

Earlier quoted context omitted.

The $200 plan you're talking about is subsidized by Anthropic. They cannot afford to keep offering that to everyone indefinitely. Absolute best case scenario for current users is that they can continue to subsidize it as way to sell enterprise plans, but there's no way that they can keep offering it to everyone at those prices.

> They cannot afford to keep offering that to everyone indefinitely. Common talking point. There's enough evidence for the counter argument that this is essentially misinformation. I have no idea why it's so often repeated with confidence.

> There's enough evidence for the counter argument that this is essentially misinformation.

> No evidence is shared

Help an open-minded critic out.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#262

Post by ath3nd »

Chyzwar wrote: post #173
stymaar wrote: post #93

Earlier quoted context omitted.

> Lastly, there is a massive difference in capabilities, determinism, and error handling between 5T SOTA models like Opus What's your source for Opus being a 5T model? > and tiny distillations from DeepSeek that perform well only in benchmarks. I don't think you know what you're talking about. Local models aren't “distillations from Deepseek”. And they don't perform well “only in benchmarks”, Qwen 3.6 is a very decen…

https://arxiv.org/abs/2604.24827 From this paper

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Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#263

Post by yandie »

CuriouslyC wrote: post #185

The future of American frontier AI isn't API calls, it's you taking your task to OAI/Anthropic like a consultant/external entity, then getting a product or whatever back, without ever seeing a large volume of intermediate work. This is inevitable because of the combination of distillation threat and proprietary harness development effort required to push performance at the bleeding edge. OAI/Anthropic are 100% going…

> it's you taking your task to OAI/Anthropic like a consultant/external entity

Good luck with that. This reminds me of the inspiration of declarative programming languages such as Prolog - you're supposed to declare the problems in such a way that the machine can solve it - rather than the imperative way where you tell the machine what to do. What they didn't realize that the definition is harder than the solution itself.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#264

Post by danielmarkbruce »

jyounker wrote: post #178
danielmarkbruce wrote: post #124

Earlier quoted context omitted.

It's 100% this. Many people suck at prompting. It's likely that habits from search are ingrained. But in general some people are just so bad at it .

Prompting is just writing specification documents. A lot of people are very bad at this. I suppose that more to the point, a lot of people are just bad at writing.

This is probably correct. Perhaps prompting just brings out the very worst in specification.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#265

Post by NortySpock »

zuzululu wrote: post #247
logicchains wrote: post #141

Earlier quoted context omitted.

>they are subsidizing a huge amount of tokens at cost This is absolutely false, because other providers serving the Deepseek models on OpenRouter are also able to offer very low prices, and they don't have the money to subsidize anything.

That makes no sense....OpenRouter didn't create Deepseek

I don't think your counterpart is arguing that OpenRouter created DeepSeek. Rather I suspect their argument is that there are 13 providers listed on OpenRouter for DeepSeek v4 Pro that are competing on price. (That's the default balancing algorithm in OpenRouter, roughly: weighted towards the lowest price and was available in the last 30 seconds)

If any providers are able to turn able to sustainably turn a profit, OpenRouter allows them to compete in an open market to process your tokens (or anyone else's tokens).

Thus anyone subsidizing tokens bears the brunt of the compute load and gains not much more than name recognition and tokens to train on, but since switching to a different provider is a matter of changing one setting in the config panel (and can be set to auto-switch based on price), switching costs are very low. Providers of open models via OpenRouter have almost zero ability to lock-in users.

So this claim that all 13 providers are selling subsidized inference is... a tough claim to swallow. Maybe some of them are, but all of them? I assume at least some providers want to show profitablity, and are pricing their service accordingly.

https://openrouter.ai/deepseek/deepseek-v4-pro/pricing

https://openrouter.ai/docs/guides/routing/provider-selection

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#266

Post by henry2023 »

fg137 wrote: post #213
henry2023 wrote: post #85

Earlier quoted context omitted.

local models are 3 to 6 months behind SOTA models with the huge benefit of not needing to send all your IP to a shady third party. If inference cost comes down (as it has been for the last few years) you’ll be able to run today’s SOTA in your laptop by the end of the year.

"shady third party" If Claude hosted on AWS bedrock is not considered trustworthy, I have some bad news for you.

Anthropic illegally downloaded virtually all copyrighted material in the world to train their models. What makes you think they will have even a little consideration for your IP?

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#267

Post by goosejuice »

cdata wrote: post #261
goosejuice wrote: post #260

Earlier quoted context omitted.

> They cannot afford to keep offering that to everyone indefinitely. Common talking point. There's enough evidence for the counter argument that this is essentially misinformation. I have no idea why it's so often repeated with confidence.

> There's enough evidence for the counter argument that this is essentially misinformation. > No evidence is shared Help an open-minded critic out.

Brand new industry, massive capital, dropping inference costs, increasing availability of compute, cost centers / subsidized subscriptions are common in SaaS, heavy competition, no public information on actual utilization rates.

How much is Waymo burning a year? 3B on 300M ARR? Anthropic is what 5B on 20B ARR? Waymo is 3x older. Why don't we hear such confident statements about how subsidized their rides are?

It's one thing to speculate it's another to parade it as fact. Even if the S1 reveals an unprofitable business today, you can still only claim it's unlikely.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#268

Post by lugu »

qudat wrote: post #253

I'm still thinking this through but I was arguing this position to colleagues to some shock: LLM's are a race-to-the-bottom and frontier models will not be able to afford to work on coding specific models (or coding features at all) in the very near future. 27B is already really good at coding-specific tasks. Fundamentally, there is little innovation on the core architecture: LLMs are all designed essentially the sam…

There hasn't ever been in human histore more incentive to innovate than today, and you think, the best lab won't innovate. That is crazy. It is like anyone can do AI research. Of course there will be new architectures. We just discovered the steam engine and the combustion engine is coming.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#269

Post by lunar_mycroft »

wahnfrieden wrote: post #223
lunar_mycroft wrote: post #167

Earlier quoted context omitted.

The $200 plan you're talking about is subsidized by Anthropic. They cannot afford to keep offering that to everyone indefinitely. Absolute best case scenario for current users is that they can continue to subsidize it as way to sell enterprise plans, but there's no way that they can keep offering it to everyone at those prices.

They can if it is a way to get individuals hooked on it to then introduce it at their workplaces, who pay enterprise rates.

Right, they can do it to sell enterprise plans, but they can't offer said plans to those enterprise customers indefinitely. So if your employer wants to spend $200/month on tokens, you're going to get however many tokens $200 buys you each month, not the order of magnitude more you can get with a consumer subscription.

Re: Outsourcing plus local AI will soon become more economical vs. frontier labs

#270

Post by opsnooperfax »

htrp wrote: post #205
simonw wrote: post #79

Earlier quoted context omitted.

I learned today that the Anthropic "Enterprise" plan - the one big companies use because they need governance features and audit logs and all of that jazz - is billed at API token rates (plus $20/seat/month). So large companies are getting billed a lot more than those discount subscription plans.

> I learned today that the Anthropic "Enterprise" plan - the one big companies use because they need governance features and audit logs and all of that jazz - is billed at API token rates (plus $20/seat/month). Can large enterprises just not use the API ? I have audit logs and what seem to be enterprise features through my anthropic account (platform.claude.ai)

Your CISO is paying to not be responsible. That’s it. That’s always the reason.
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